CHAPTER 10 Brand Association reflects the mental links that consumers make between a brand and its key product attributes such as a logo slogan or famous personality Brand Dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold Brand Equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product of service Brand Extension refers to the use of the same brand name for new products being introduced to the same or new markets Brand Licensing a contractual agreement between firms whereby one firm allows another to use its brand name logo symbols and or characters in exchange for a negotiated fee Brand Loyalty when a consumer buys the same brand s product or service repeatedly over time rather than buy from multiple suppliers within the same category Rebranding a strategy in which marketers change a brand s focus to target new markets or realign the brand s core emphasis with changing market preferences Co Branding the practice of marketing two or more brands together on the same package or promotion Perceived Value of a brand is the relationship between a product or service s benefits and its cost Product Assortment or product mix is the complete set of all products offered by a firm Product Lines groups of associated items such as items that consumers use together or think of as a part of a group of similar products Product mix product assortment is the complete set of all products offered by a firm CHAPTER 11 Innovation the process by which ideas are transformed into new products and services that will help firms grow The longer a product exists in the marketplace the more likely it is that the market will become saturated Without new products or services the value of the firm will ultimately decline Pioneers breakthroughs new product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market iPod First movers product pioneers that are the first to create a market or product category making them readily recognizable to consumers and thus establishing a commanding and early market share lead Diffusion of innovation the process by which the use of an innovation whether a product or service spreads throughout a market group over time and over various categories of adopters Innovators those buyers who want to be the first to have the new product or service Innovators are crucial to the success of any new product Early adopters the second group of consumers of diffusion of innovators to use a product or service innovation generally don t like to take as much risk as innovators but instead wait and purchase the product after careful review Early majority a group of consumers that represents approximately 34 of the population members don t like to take much risk and therefore tend to wait until the bugs are worked out of a particular product or service few new products and services can be profitable until this large group buys them Late majority the last group of buyers to enter a product market when they do the product has achieved its full market potential Laggards consumers who like to avoid change and rely on traditional products until they are no longer available Using the diffusion of innovation theory firms can predict which types of customers will buy their new product or service immediately after its introduction Relative advantage if a product is perceived to be better than substitutes then the diffusion will be relatively quick Compatibility ritual being engraved in the culture Observability when products are easily observed their benefits or uses are easily observed their benefits or uses are easily communicated to others thus enhancing the diffusion process Complexity and trialabilty products that are relatively less complex are also relatively easy to try The Product Development Process o Idea Generation Concept Testing Product Development Market Testing Product Launch Evaluation of Results Idea Generation o Internal research and development R D efforts Product development costs are high but the product has a chance to be a technological breakthrough Firms expect such products to generate enough revenue and profits to make the costs of R D worthwhile however they are considered continuous investments so firms may lose money in the long run o R D Consortia more and more groups have been joining consortia or groups of other firms and institutions to explore new explore new ideas or obtain solutions for developing new ideas or to obtain solutions for developing new products NIH Clinical trial medical test of the safety and efficiency of a new drug or treatment with human subjects o Licensing Firms buy the rights to use technology or ideas from other research firms through a licensing agreement in order to save the high cost of in house R D but it means that the firm is banking on a solution that has already exists but has not been marketed o Brainstorming firms often engage in brainstorming sessions during which a group works together to generate ideas this way no idea can be immediately accepted or rejected o Competitor s products a new product entry by which a competitor may trigger a market opportunity for a firm Reverse engineering involves taking apart a competitor s product analyzing it and creating an improved product that does not infringe on the competitor s patents o Customer input listening to the customer is essential for successful idea generation Lead users innovative product users who modify existing products according to their own ideas to suit their specific needs Sponsor contest Concepts brief written descriptions of a product or service its technology working principles and forms and what customer needs it would satisfy Concept testing the process in which a concept statement that describes a product or a service is presented to potential buyers or users to obtain their reactors These reactions enable the developer to estimate the sales value of the product or service concept possibly make changes to enhance its sales value and determine whether the idea is worth development The most important questions pertains to the respondent s purchase intentions if the product or service were made available Product development product design entails a process of balancing various engineering manufacturing marketing and economic considerations to